Pending Home Sales Surge to Nearly 3-Year High

Dated: December 30 2025

Views: 39

More home buyers are going under contract as lower mortgage rates help improve housing affordability conditions.When mortgage rates started to drop this fall, home buyers took notice. More consumers are stepping back into the housing market, and contract signings are on the rise. Those lower rates also have been credited with fueling three consecutive months of gains in existing-home sales. Economists are hopeful that the momentum will continue into the 2026 housing market.

The National Association of REALTORS®’ newly released Pending Home Sales Index—a forward-looking indicator of home sales based on contract signings—showed that contract signings climbed 3.3% in November compared to October and are up 2.6% from a year ago. The strongest growth occurred in the West, where contract signings surged 9.2% month over month, followed by a 2.4% increase in the South. More modest gains were posted in the Northeast and Midwest by 1.8% and 1.3%, respectively. In October, it was the Midwest that led the way with a 5.3% increase in pending sales over September.

“Home buyer momentum is building,” says Lawrence Yun, NAR’s chief economist. “The data shows the strongest performance of the year after accounting for seasonal factors, and the best performance in nearly three years, dating back to February 2023. Improving housing affordability—driven by lower mortgage rates and wage growth rising faster than home prices—is helping buyers test the market. More inventory choices compared to last year are also attracting more buyers to the market.”

Although housing inventories have shown signs of tightening during the winter—NAR’s data showed a 6% month-to-month drop in November—inventory is still about 8% higher than a year ago, giving buyers more options than they’ve had in years.

Housing Gets More Affordable

Housing affordability improved this fall as median family incomes increased, and mortgage rates declined, NAR’s Housing Affordability Index shows. These factors also helped to offset still-rising home prices, which increased to a median existing home price of $409,200 in November.

The monthly mortgage payment on the median-priced home has fallen from a peak in June thanks to declining mortgage rates.

The 30-year fixed-rate mortgage averaged 6.24% in November, according to Freddie Mac. Buyers’ extra attention to rates also shows up in the mortgage application data: Applications for home purchases—another gauge of future home sales—have posted double-digit annual gains over recent weeks.

Real estate professionals are seeing the same pattern emerge locally: When mortgage rates drop, home buyers return.

“The affordability issue has been holding a lot of buyers back the last three years, and mortgage rates coming down is a way of resolving a lot of that pain,” says Brad O’Connor, chief economist at Florida REALTORS®, who noted a turnaround in Florida with pending home sales starting to rise as mortgage rates dropped this fall. “If it’s possible to get mortgage rates under 6%, that would really go a long way toward reigniting the housing market.”

Looking ahead, NAR forecasts that mortgage rates could average 6% in 2026—a notable improvement from roughly 7% at the start of 2025. That one percentage point drop in rates, from 7% to 6%, could bring about 5.5 million additional households, including 1.6 million renters, into the pool of potential buyers for 2026, NAR research shows.

Blog author image

Latest Blog Posts

Think Home Prices Will Crash? Here's What the Experts Actually Expect.

Posted by Kayla Nelson
June 17 2026
0 comments

Think Home Prices Will Crash? Here's What the Experts Actually Expect.One of the biggest reasons buyers are still sitting on the sidelines is because they think home prices are going to come down

Read More

Should You Pay for Your Buyer’s Closing Costs? What Sellers Need To Know.

Posted by Kayla Nelson
June 15 2026
0 comments

Should You Pay for Your Buyer’s Closing Costs? What Sellers Need To Know.A few years ago, sellers could get away with saying "no" to just about everything.No repairs.No concessions.No

Read More

National Housing Report – April 2026

Posted by Kayla Nelson
May 27 2026
0 comments

May 19, 2026|Get the latest, News, REMAX ReportsNew listings outpaced home sales in April as inventory increased Home sales increased in April, but the number of new listings outpaced demand,

Read More

The Truth About Affordability Today

Posted by Kayla Nelson
May 27 2026
0 comments

The Truth About Affordability TodayLet's be real with each other for a second about affordability. Because you deserve someone who will be honest and transparent about what’s going on,

Read More

Property Search

Contact Information

Address: 920 W Broadway
Forest Lake, MN 55025

Search Blog

Our Bloggers

Zachary Carchedi Posts

Zachary Carchedi

2 Posts

Daniel Schultz Posts

Daniel Schultz

24 Posts

Makenzie Gay Posts

Makenzie Gay

2 Posts

Mel Neuberger Posts

Mel Neuberger

2 Posts

Michael Muske Posts

Michael Muske

8 Posts

Tina Thompson Posts

Tina Thompson

66 Posts

Kayla Nelson Posts

Kayla Nelson

61 Posts

Chris Siverhus Posts

Chris Siverhus

22 Posts